The Nigerian National Petroleum Company (NNPC) Limited has announced the successful conversion of five oil mining leases (OMLs) into a combination of four petroleum prospecting licenses (PPLs) and 26 petroleum mining leases (PMLs), in partnership with Chevron Nigeria Ltd (CNL).
The agreement, formalized at a signing ceremony held at the NNPC Towers in Abuja on Monday, marks a pivotal transition under the new Petroleum Industry Act (PIA) framework.
Femi Soneye, NNPC’s spokesperson, explained that this conversion is part of the broader mandate of the PIA 2021, which aims to shift assets from the old Petroleum Profit Tax (PPT) regime to more modern and investor-friendly terms.
“In line with the Petroleum Industry Act (PIA) 2021 provisions of transiting assets from the Petroleum Profit Tax (PPT) into PIA terms, the NNPC Ltd. and its Joint Venture (JV) partner, Chevron Nigeria Ltd (CNL), have concluded the conversion of five of its JV assets into the PIA terms,” Soneye stated.
The PIA, enacted in 2021, automatically converts all existing Oil Prospecting Licenses (OPLs) and Oil Mining Leases (OMLs) to Petroleum Prospecting Licenses (PPLs) and Petroleum Mining Leases (PMLs) upon their expiration.
However, it also offers a voluntary conversion option for holders under the previous PPT regime, a move seen as fostering a more conducive environment for investors.
During the ceremony, documents were signed to officially transition the specified assets in alignment with the new PIA terms. This strategic move is expected to enhance domestic gas supply and expand Nigeria’s presence in the global market.
Mele Kyari, NNPC’s Group Chief Executive Officer (GCEO), praised Chevron for its steadfast partnership and its decision against divesting from shallow water oil production.
“Over the years, Chevron has been a partner of choice that has not contemplated completely divesting/exiting (oil production in) the shallow water and we are proud of them,” Kyari remarked. He assured ongoing collaboration to create more value for both entities and to expand Nigeria’s footprints in both domestic and export gas markets.
Michelle Pflueger, Director of Deepwater and Production Sharing Contract at Chevron, underscored the conversion’s importance for both companies, reaffirming Chevron’s long-term commitment to these assets.
Oritsemeyiwa Eyesan, NNPC Executive Vice-President, Upstream, and Bala Wunti, NNPC’s Chief Upstream Investment Officer, both highlighted the strategic significance of the conversion.
They pointed out that adapting to the PIA terms is crucial for the successful implementation of the act and for boosting crude oil production.
Wunti noted the partnership’s target to achieve a 165,000 barrels per day (bpd) crude oil production by year-end and emphasized CNL’s role in maintaining network stability and facilitating domestic gas supply.
